Kim Yong Il was scheduled to hold three days of talks with South Korean Prime Minister Han Duck-soo. The two sides last held prime ministerial talks in 1992 that were suspended amid the first crisis over the North's nuclear weapons program.

Han is the deputy of South Korean President Roh Moo-hyun. In North Korea, the premiership is among several high-level positions, but ranks below leader Kim Jong Il and the country's No. 2 official Kim Yong Nam.

This week's talks are aimed at fleshing out an agreement that Roh and the North Korean leader signed at their October summit in Pyongyang - only the second such meeting since the Korean peninsula was divided more than half a century ago.

That accord calls for greater peace and economic cooperation across the world's most heavily fortified border.

The talks come amid progress in international efforts to rid North Korea of its nuclear programs, with the communist nation beginning to disable its sole operational nuclear reactor recently under a deal with the U.S., South Korea, China, Japan and Russia.

Seoul believes that promoting reconciliation with Pyongyang would facilitate resolution of the nuclear dispute.

This week's negotiations focus mainly on economic cooperation projects, including setting up a joint fishing area around their disputed western sea border and establishing a joint economic area on the North's southwestern coast.

Also on the agenda are building joint shipyards in the North and improving convenience for South Koreans working at a joint industrial zone in the North Korean border city of Kaesong by simplifying border customs inspection and improving communication networks at the zone.

Other topics include expanding reunions of separated families.

Security issues are not expected to be on the table as the two sides will hold defense ministers' talks in Pyongyang later this month.

South Korea's JoongAng Ilbo newspaper reported Wednesday that the two sides have been discussing a North Korean offer to send the country's No. 2 leader, Kim Yong Nam, to Seoul early next month and that the issue is expected to be on the agenda for this week's talks.

Seoul's Unification Ministry denied the report as groundless.

The North's premier Kim is an economic technocrat who served as the country's land and marine transportation minister. Kim recently visited Vietnam, Malaysia, Cambodia and Laos, signing a series of economic cooperation accords with those countries.

Most other members of the North's 43-strong delegation are also economic officials.

The two Koreas fought the 1950-53 Korean War that ended in a truce, not a peace treaty, which means that the sides are still technically at war. Their relations have warmed significantly since the first-ever summit in 2000, although the reconciliation process has often been overshadowed by the standoff over the North's nuclear weapons programs.

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